Vertical Maritime

04-03-2017, 08:29 AM

After news about Maersk & Alibaba deal and Norwegian owners merge (Farstad Shipping, Deep Sea Supply and Solstad Offshore ASA), decided to share some thoughts with you guys, but pls be nice as i`m not a speech writer.

Since the start of the biggest Oil & Gas crisis, which led to the same issue with Maritime industry, the enormous amount of analytical articles about reasons cause & predictions were raised. Lot of “loud” words used to describe two key statements crossing almost all articles by a red line as an answer able to reshape & save the industry: “Digitalization” & “Death of the middle man” (Seems like somebody is heavily lobbying the same).

Due to the absents of any other ideas let`s assume, that`s it – the way out!

If, with “Digitalization” it’s more or less clear, watching the amount of IT positions DNV GL is hiring via LinkedIn we can even try to predict who is planning to be the frontrunner coming years (Lobbing the same??), but what is “Death of the middle man” for the Shipowners?

The most obvious one here is to slash any of Crew/HR (Death of Crewing`s) and Cargo/Chartering (Death of Brokers) outsource, trying to establish efficient operations and get those guys in HR and Chartering departments from Facebook back to work. Although, it could be enough for some companies in terms of short-term saved revenue, for long-term I would suggest to remember 2007-2008 crisis, lessons learned and meaning of Vertical Integration (https://en.wikipedia.org/wiki/Vertical_integration ) in particular.

Strategic decisions made by key market players, which let them to stay afloat to nowadays could make some clarity to us. Maersk is a very good example of vertically integrated company here. Despite in 2008 they`ve announced to move away from VI - didn’t notice it`s really happened.

Going back to the deal with Alibaba, it looks like they continue moving towards VI and soon will finish the “circle” by interacting directly with end-users. Could this mean that internal company analytics showing the concept of VI is working Ok and worth of doing the same during present crisis?

From the other side, merge of Norwegian OSV owners, as a fast response to potential “financial grave” in order to stay afloat for a while, hopping that “fat” margin days would come back in few years. What if, instead of unite unprofitable companies of the same direction, to think about your market clients and merge with them? If you are an Offshore vessels holder, go for Oil & Gas majors, if merchant – go for cargo owners…is it make sense?

No figures or answers with me, but worth of keeping in mind anyway :-)